Wednesday, March 30, 2011

A strong positive breakout! Indeed can be Primary 3...

Nifty Daily

Nifty 240 mins

Nifty 60 mins

As seen daily chart, we see prices moved above the 2 std dev Bollinger Bands® turning the upper band along with price. This indicates a very strong trend which is up. We are now intermediate term bullish and we do not see any exhaustion so far on intermediate term basis.

Traders and investors have tendency to try and catch the turns. This has happened all the time when market was falling from 6300 levels to 5200. But we have been quite successful in trailing our stops rather than predicting when the minor down move happens. We will now not try to predict when a minor correction will happen but to use that correction to create a long position.

As we have shown on our alternate chart before, we can be in a primary degree 3rd wave and this can be just explosive wave where everyone waiting for pull back to enter and a meaningful correction never happens. Please understand markets have been moving on a rotational basis since many months now and this is what might happen again. So, we will rather stay in the trend using trailing stop loss then to be out of it waiting for corrections.

We do not want to reflect too much bias towards up move as the advance decline ratio is a concern as we still do not see major stocks participating in the rally. Small cap and Mid cap indices are still consolidating.

As seen on 60 mins chart, uptrend remains intact. 5600 – 5650 should now provide strong support. Any move below 5550 will signal danger sign to the strong rally up but that looks a low probable scenario.

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